Thank you Larry:
But I don't plan to login here often. Time permitting, I will!
I was alarmed by today MEMC's volume surge. I just got off the phone with Sam Duggan. I didn't like what I heard. I am sure some of you won't like what you hear from me. Other than Ken and Doug most of the folks posting under MEMC subject are new to me. I owe this to Ken Sanders, at least! Here is a copy of the note I just posted on Prodigy.
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Friends:
Back in September 1995 or so I started writing research
notes on MEMC on this board. Since it went public in July,
1995 I could be one of the first to follow this stock. Let
me the first to give a SELL recommendation on MEMC. If you
are long on MEMC and your emotions flared-up by reading my
recommendation, please read the rest of this note before you
give me a piece of your mind.
First, keep in mind that I just got off the phone with
Sam Duggan at their investor relations. My recommendation is
based on what I heard from him.
Since August 1995 - many who bought MEMC based on my
advise made some good money, including myself. Since the
beginning of June I turned cautious about MEMC. Not because
of any problems I saw at MEMC but because of the guilt by
association stigma.
Today, semiconductor industry fundamentals are worse
than ever. I dont know if this is absolute bottom for the
industry. I will let others take that risk. I am not crying
wolf here. Rather, I now believe that MEMC is one of
the last dominos to fall. In one of my earlier notes I
mentioned about price erosion as a contagious disease. MEMC
did not see any price weakness but experienced some order
cancellations during the 2nd quarter. Supply is catching-up
with demand. With additional capacity coming on-line in a
year, things could get ugly.
End of June, some insiders sold stock. I dont know how
much. Yesterday's a large block of 178,800 shares was crossed
by JP Morgan (their lead underwriter.) I wondered if it was
some insider selling. Sam told me that insiders are in a
quiet period and only have a small window where they can
trade after the earnings are released. So, I take it as
non-insider sale. But definitely by some institutions. We
are the little guys and we should protect ourselves first.
Now that I said what I have to, I am ready for the rap I
get for my recommendation.
I still think that MEMC will earn $1.00 for this quarter.
Probably not as much for the 3Q. Watch for a "cautious note"
with next earnings release.
Good Luck to all.
>>Mohan in Norwood, MA |
